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Are Spreadsheets an Effective Medium for Tracking your Compliance?

April 12, 2022

By Neil O'Sullivan, Business Development Manager

In today’s regulatory environment, organizations are faced with ever-changing laws and regulations being frequently introduced by various governmental bodies and institutions. Many facing the predicament of implementing measures to adhere to these regulations are finding it challenging to stay up-to-date with the changes ensuring they meet sufficient compliance standards.

Many organizations' first approach was to use the standard office tools like Excel and Word due to their familiarity, and ease of access to these tools. However, these methods don’t offer effective traceability and rarely provide an accurate audit trail for content entry. Many organizations have actually found that spreadsheets have become the source of the problem rather than the solution and have banned them from the compliance process.

Firms know if they implement a policy and keep it up-to-date that they will have a framework in place. However, this does not demonstrate to the board, or to regulators, that the firm is fulfilling the obligations of this policy in practice and are often times unable to provide an audit trail to validate activity. The answer is to use a compliance software tool, a little more on this later but first, let me tell you even more reasons why spreadsheets are RARELY the answer.

Spreadsheet Pros and Cons

Spreadsheets are not suitable for monitoring business performance. How do we know this? Just take a look at any successful corporation and how they deal with reporting, financial accounting or budgeting. Do the auditors and the board require more than an ad hoc collection of spreadsheets? The answer is yes. They need a process to capture, manage, analyze and report on financial information.

Likewise, the compliance function needs to demonstrate a systematic and robust process to satisfy the regulatory obligations of the board.

The Pros

  • Spreadsheets are the comfort zone. They are relatively inexpensive and compliance officers feel comfortable with them.
  • Spreadsheets are proficient in documenting and reporting very simple stand-alone requirements.

The Cons

  • Spreadsheets are time-consuming with the compliance officer spending a significant amount of time collecting data.
  • They become exponentially difficult to manage when multiple compliance sets and multiple geographic locations are involved.
  • They are not designed to record an audit trail of accountability.
  • They require manual intervention to deliver reports.
  • They struggle to assign owners to processes.
  • They do not deliver automated workflow driven processes. This often leads to a whole host of different spreadsheets across the organization.
  • This is not a secure process when email is primarily used to send documentation to others for updates and version-control becomes challenging.

Compliance Software Tools

The increased emphasis put on compliance disciplines, internal audits, governance and enterprise risk management, has led numerous companies to seek a compliance monitoring tool to demonstrate accountability and transparency, and to drive efficiency into the ever-increasing burden of compliance.

These solutions provide greater efficiency, reducing time consumption and resource costs linked with governance, risk and compliance processes.  Organizations need a solution that can be easily integrated into their current work environment, and that provides shared functionality for common tasks. It is essential that the chosen solution, eliminates the effort of printing off countless spreadsheets, reduces data entry, and improves accountability and accuracy, while also enhancing efficiency and consistency.

Ideally, firms wish to have all of their compliance monitoring activities in a single integrated system that delivers consolidated enterprise reports, rather than a multitude of point solutions.

The attraction for using spreadsheets is there, but don’t be a slave to the extra paperwork, time and the hidden costs involved. The importance of having a compliance monitoring tool is clear, without one you lose your ability to demonstrate clearly that your company has a systematic approach to compliance with a complete audit trail of performance over time.

You shouldn’t need to worry about managing your regulatory requirements, but by having an appropriate compliance software tool you will be stress-free, spend less time chasing data, and have more time to think about how to improve your processes and outcomes.

Services performed by ViClarity are compliance and not legal in nature, and do not form an attorney-client relationship or any of the protections attendant to the attorney-client relationship.

 

 

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